BRAZILIAN BANKING: End of the golden age

BRAZILIAN BANKING: End of the golden age

Bonds Structured Finance Brazil

By John Rumsey The cosseted Brazilian banking sector is facing unprecedented challenges. A government push to lower interest rates and moves to encourage public sector banks to lend more as part of a drive to squeeze spreads is coming on top of much higher delinquency rates. Average 90-day non-payment levels across businesses and individuals hit 6% in May, the highest level since the series began in 2000, according to central bank data. Individual credit defaults reached 7.98%, the highest level since November 2009 when it reached 8%. Private banks would like to draw in their horns on credit, but are afraid of losing market share. The government has already enacted a bold series of m

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